Minto councillors not happy about end of tax exemption on one-third of salaries

Council here will consider sending a letter to Perth-Wellington MP John Nater opposing the discontinuance of a tax-free allowance for municipal councillors.

The March 21 federal budget indicated plans to remove a long-standing tax exemption on one-third of the salaries for municipal councillors beginning in 2019.

Since 1990, the Municipal Act has provided that one-third of the salary paid to an elected member of council was deemed to be for “expenses incurred in the discharge of the member’s duties,” and not subject to income tax.

“I was in contact with our representative, Mr. Nater,  and he’s going to ask us to show a letter of support so he can bring it up in the legislature,” said deputy mayor Ron Faulkner at the April 4 council meeting.

Faulkner requested the matter be put on the agenda for council’s next meeting on April 18.

“I know what it’s meant to do, but it’s going to punish an awful lot of small councils and it’s hard enough to get people to run,” he stated.

Mayor George Bridge noted the Federation of Canadian Municipalities and the Association of Municipalities of Ontario are both looking into the issue.

“I don’t know what the rationale is,” said Bridge.

“Basically what it does is, we have a hard enough time to get people to run for council now with what you pay; and don’t get me wrong, but that’s why you get old guys like me that can afford to. You can’t get young people. They can’t afford to take time off work and do all that stuff.”

Bridge said municipalities will be under pressure to raise compensation for council members in order to keep it at current levels.

“So it’s really downloading. The government will get a few more dollars federally but it’s really downloading it back to municipalities,” Bridge stated.

“And they’re going to grab a whole bunch of money that they never got before,” said councillor Ron Elliott.

Bridge replied, “It’s very small in the overall amount that the federal government will actually get when you look at their … budget. But it’s harder on us.”